Study: Brand keywords for paid search ads 'ineffective'

Recent research reveals that brands buying search ads with their own brand name as a keyword are wasting money selling to people they don't need to sell to.

Consumers performing brand-specific searches on search engines such as Google and Bing are already navigating to a brand's website. It follows, therefore, that this isn't an audience brands need to get their ads in front of.

According to experiments carried out by eBay Research Labs economists Thomas Blake, Chris Nosko, and Steve Tadelis, organic search results for brand-specific queries work just as well as paid search ads, even if the results appear lower down the page. This was confirmed by experiments showing 99.5% of eBay site traffic was retained despite paid ads for 'eBay' being shut down across Google and elsewhere.

"The results of our study show that for a well-known brand like eBay, the efficacy of SEM is limited at best," say the economists in their resulting paper, 'Consumer Heterogeneity and Paid Search Effectiveness: A Large Scale Field Experiment'. "For the most part, paid-search expenditures are concentrated on consumers who would shop on eBay regardless of whether they were shown paid search ads."

Other findings of the research were that the effectiveness of search engine marketing for non-branded keywords is "small for a large and well-known brand like eBay" and that there is a "small yet detectable positive impact of SEM on new user acquisition and on informing infrequent users about the value of using eBay".

Overall, the findings support the informative view of advertising and the value of targeting the "uninformed" search user.